Corn weather market heats up

The corn weather market continues to heat up, as planting delays are
becoming more and more critical.

As of Monday, we have the latest planting
progress since 1993 at only 10% planted vs. 35% average. The weather
forecast is not encouraging, with the next 2 weeks back to forecasting more
wet conditions for the Corn Belt. Some planters are moving in fringe areas,
but not nearly enough to turn the situation around.

The past few days, the outside markets have been preventing the corn market
from rallying further, with energy and metals lower to sharply lower.
Although Dec futures made new highs, the nearby May contract has not. This
is often indicative of shrinking demand when the nearby month fails to run
to new highs. Bear spreads are working, a sign that demand might be
slowing. We've noticed a slowdown in the pace of exports, while many
policymakers (Congress and the President) are talking about scaling back the
ethanol supports. This is a double edged sword for demand, and one that
could derail the bull market. Tuesday corn futures formed a daily downside
reversal on charts, a negative technical signal. If not for the negative
technicals and sagging outside markets, corn would be roaring higher now t
based on terrible planting weather. It's almost like the market is waiting
for improving weather to head lower!

The soybean/corn price ratio has also shrunk to 1.9, with soybean prices
sagging further relative to corn prices. With delayed planting, the market
is trying to maintain corn acres by rallying relative to soybeans. We need
this, as many producers might have their hand forced by the weather towards
soybeans, especially in MO, ILL, IND, and OH as well as eastern IA where
planting progress is pathetic.

Corn prices are starting to look like a shining star in the marketplace,
still strong while the other grains have gone through their struggles. The
degree of planting delays is becoming more serious with each passing day.
Of some concern besides the wet weather is how the cool pattern has
maintained itself all spring. There are areas that are in drought, too, but
still the progress is behind in these areas as well due to cold soil
temperatures. This could become a critical issue in the northern
corn/soybean production areas, as not only is planting late, but a continued
cool weather pattern would be a worst case scenario behind late planting.
There aren't many crops that can mature at 4-6 degrees below normal temps
and late planting!

While everyone is aware of planting delays, we have to keep an eye on
weather as we have noticed a slight change to more normal temps and less
precip falling in IND, OH, and many ILL areas. They could get a window of
opportunity if they miss a rain or two, and given the improved mechanization
of production many producers can get the whole crop planted in 10 days. So
weather is clearly the critical animal for bulls, as verification of
planting problems through the ideal season (into Mid-May) would clearly
spell trouble for corn national yields. And so far, that's exactly what
we've got!